Ministers have been accused of inflicting "unnecessary damage" on the 638 schools they named as under-performing as a number won a reprieve with dramatic improvements in results yesterday.

The government has proposed a package of support for schools where under 30% get five A* to C grades in GCSEs, including maths and English, but those which fail to rise above the National Challenge target by 2010 face being replaced with an academy.

John Dunford, general secretary of the Association of School and College Leaders, said that some of the schools had seen dramatic improvements.

"This highlights the serious error of judgment made by the government in May when it announced the National Challenge, creating such unnecessary damage to the reputation of many schools. Pupils and staff in National Challenge schools have been placed under serious pressure and this must be matched by support," he said.

"Schools moving above and below the arbitrary threshold of 30% each year highlights the stupidity of putting a school's reputation at risk on the basis of a single year's results."

There was no official data on the progress of the 638 schools published with yesterday's GCSE results but the Guardian spoke to several of those affected. Joseph Ruston Technology College in Lincolnshire, Aston Manor School in Birmingham and Banbury School in Oxfordshire all rose above the 30% threshold.

At Walker technology college in Newcastle, 31% of pupils got five A* to C grades - up 10% on last year. Steve Gater, the school's headteacher, said he was "over the moon". However, the school had been "tarred by that brush that says you are a failing school", he said.

Of the 223 GCSE students at Woodside high school in Haringey, north London, 28% met the target, which could rise to 30% if appeals succeed. Three other schools in Haringey broke the 30% barrier.

At Parklands high school, in Liverpool, 15% of pupils got the grades. But it was a substantial improvement compared with the 1% last year. Headteacher Alan Smithies said: "We have to live with it and get on with the job in hand. We're in the second most deprived ward in the country and we are being described as failures. There's academic success but also other success in engaging kids that might not be engaged otherwise."

Lord Adonis, minister for schools, said: "As we said at the launch of National Challenge, many National Challenge schools are improving fast, with strong leadership and high aspirations. National Challenge schools will still be receiving extra funding, help and support to help them continue to improve and sustain those improvements for the long term."